Stocks remain overbought at current levels and volatility remains low.
Portfolio manager Lance Roberts expects markets to tread sideways until next week's CPI data and latest Fed guidance are in.
If they show the economy is indeed slowing down faster than expected and/or inflation is moderating, stocks will likely pop as rate cut hopes will be put back on the table.
But if not, will markets drop? As Lance notes, valuations and earnings forecasts are now at elevated extremes, and any diminishment to the current optimism could start giving investors the jitters.
We discuss these odds, as well as the weakening labor market outlook, the GameStop circus show, concerns about AI demand, and Lance's latest trades in this week's Market Recap.
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